AFH Financial acquires Suffolk-based Euinsure

Financial planning-led wealth management firm AFH Financial Group announced the acquisition of the entire issued share capital of Eunisure on Friday, which it described as a face to face adviser-led financial planning business focused on the protection market based in Newmarket, Suffolk.

The AIM-traded company confirmed the purchase was completed on 1 June, and added vendor and current managing director Ralph Mortlock would remain on the board of Eunisure.

Under the terms of the acquisition, the maximum consideration payable by AFH was £4.5m, based on a targeted increase in group profitability attributable to the core Eunisure business and introduced financial planning led investment management.

The consideration for the acquisition was to be paid in cash, with the initial consideration already satisfied by a payment of £1.5m, which had been funded from the company's existing cash resources.

Further deferred consideration of up to £3m would be payable over the next 48 months in four tranches, dependent on set performance criteria of Eunisure being met in each 12 month period.

For the year ended 31 December 2016, Eunisure generated revenues of £5.6m and reported profit before tax of £0.24m, which AFH estimated to be approximately £0.95m profit before tax on a pro forma basis.

“The protection gap in the UK has been widely reported,” said AFH chief executive Alan Hudson.

“Eunisure is one of the leading face to face advisory businesses in this sector with national coverage throughout the UK.

“I believe that the acquisition of Eunisure will significantly increase the distribution capacity of AFH whilst at the same time enabling Eunisure to develop rapidly in its core market.”

Hudson said Eunisure had a “young” adviser force, and AFH looked forward to developing a number of those advisers through its structured training programmes to mortgage advisory and full financial planning qualifications.

He added that the deal had been structured to create shareholder value through additional financial planning opportunities and growth within the existing business.

“I look forward to working closely with Ralph to drive both Eunisure and the distribution of AFH's wealth management services in the future.

“Yesterday's acquisition of Parker Sage together with Eunisure's today represents a step change in profitability for the group adding over £2m of pro forma annualised EBITDA.

“In addition we continue to have a strong pipeline of future acquisition opportunities,” Hudson added.